Shares of Dole Food Down Almost 15% Following Concerning Comments on Fresh Fruit Business

Dole Food Company (NYSE: DOLE) earlier issued a release confirming the expected closing of its sale of the worldwide packaged foods and Asia fresh business units. Also within this release the company's Michael Carter gave some concerning updates.The stock is down more than 14 percent at last check.“We arepleased to announce that we are finalizing the written commitments from fourof Dole's banking partners for a new $400 million term loan and a $300 millionrevolving credit facility, to be implemented upon completion of the saletransaction. The $400 million term loan, together with substantially all ofthe proceeds from the sale transaction, will allow us to pay off our existingindebtedness of approximately $1.7 billion, and will provide needed fundingfor transaction-related taxes, costs and expenses, extinguishment of all orpart of our long-term Japanese yen hedges, the anticipated right-sizing of thenew Dole and other post-closing restructuring expenses, and possibleresolution of the previously disclosed Honduras tax case, European UnionAntitrust Inquiry and the DBCP cases. Upon consummation of the saletransaction, Dole's resulting net leverage ratio will be approximately 1.8x(based on the new net debt level and 2013 projected Adjusted EBITDA of the newDole), and we will benefit from a significant reduction in interest expense.”On December 4, 2012, Typhoon Bopha, with high winds and heavy rain, struck thebanana growing region in Mindanao, Philippines. The current estimated impactto the Asian banana industry is a loss of 30 million 13-kilo boxes, which isapproximately 14% of the Asian banana industry on an annualized basis. “Whilethe immediate effect has been an increase in prices in the Asian market, wehave not yet seen any impact on prices in the North American and Europeanbanana markets,” said Mr. Carter.“Despite the tightening global supply, we continue to see aggressive contractnegotiations in the North American banana market even though costs are higher,with some importers seeking to buy market share,” said Mr. Carter. “Whileright-sizing initiatives for the new Dole will partially offset these impacts,our current expectation is that pro forma 2013 Adjusted EBITDA for the newDole, including 2013 planned cost savings in the $20 million range, will be inthe $150 - $170 million range, with income from continuing operations, net ofincome taxes, in the $45 - $60 million range, assuming no major marketchanges. The fresh fruit business of the new Dole is continuing to experiencedeclining earnings in a continued difficult economic environment.”“While the current environment in the banana market remains challenging, Iremain very optimistic about the long-term future of the new Dole and itsprospects,” stated David H. Murdock, Dole's Chairman. “I am excited to bereturning to the position of CEO, working with Michael Carter and Dole's newmanagement team, all of whom are committed to our right-sizing efforts anddelivering synergies within Dole's remaining fresh fruit and vegetablesbusinesses.”